"KeLing 2.5 Turbo" high performance, low cost! Goldman Sachs: Kuaishou is at the global top level of AI video

The perfect combination of technological breakthroughs and cost control has once again set a new industry benchmark for KUAISHOU's AI video large model.

On September 25th, according to Hard AI news, Goldman Sachs stated in its latest research report that KUAISHOU's "Keling AI 2.5 Turbo" model has achieved nearly a 30% cost reduction while maintaining top performance, positioning KUAISHOU as a top player in the global AI video generation field.

The report noted that KUAISHOU released the latest "Keling AI 2.5 Turbo" model on September 23rd. According to the company, this model has made substantial improvements in text response, dynamic effects, style consistency, and aesthetic quality, and further enhanced controllability, stability, and consistency in the video generation process. Notably, in high-quality mode (1080p), the new model generates a 5-second video at a cost of only 25 points, nearly 30% cheaper than version 2.1.

Goldman Sachs analysts believe that this model performed excellently in comparative tests against major competitors, while also being more competitively priced, which is expected to drive user growth and commercialization.

The firm maintains a buy rating on KUAISHOU, with a 12-month target price of HKD 83, indicating a 12.1% upside from the current stock price. Analysts expect the annual recurring revenue (ARR) of Keling AI to reach USD 154 million in fiscal year 2025, higher than the company's official guidance of USD 125 million.

Balancing Performance Improvement and Price Advantage to Establish Competitive Edge

The latest Keling 2.5 Turbo model launched by KUAISHOU has significantly reduced costs while maintaining high performance, providing users with a more economical AI video generation solution. This dual advantage of price and performance is expected to retain existing users while attracting more new users.

Goldman Sachs' research report pointed out that in comparative tests against major competitors, users showed a clear preference for the Keling 2.5 model. Test data shows:

Compared to Seendance 1.0, 51% of users preferred Keling 2.5;

This preference increased to 57% when compared to Seendance 1.0 mini;

When compared to Veo3 fast, the user preference rate for Keling 2.5 reached 69%.

Goldman Sachs stated that this data indicates KUAISHOU has reached a global leading level in AI video generation technology.

In terms of price advantage, the latest Keling 2.5 Turbo model is more attractive compared to its peers. In high-quality mode (1080p), generating a 5-second video costs only 25 points, nearly 30% cheaper than version 2.1.

Goldman Sachs believes that this price advantage allows KUAISHOU to offer top performance at a more competitive price, which is crucial for retaining existing users and attracting new ones

Huge Commercial Potential, Market Share Expected to Increase

Goldman Sachs analysts believe that although competitors like Google and ByteDance are launching powerful image/video generation models, the AI video generation industry is still in its early stages, with the overall market size rapidly growing and disrupting traditional advertising and short film production models. In this context, continuous model capability upgrades and user penetration are key focuses.

The research report states that the technological improvements of Keling AI 2.5 Turbo lay the foundation for its application in professional creative production scenarios, covering multiple fields such as film and television, short films, games, animation, and advertising marketing, while also providing high-quality video generation solutions for individual creators. This expansion of technological capabilities is expected to significantly broaden the application scope and revenue sources of KUAISHOU AI business.

Goldman Sachs predicts that Keling AI's annual revenue will grow from $154 million in 2025 to $365 million in 2027, with a year-on-year growth rate reaching 62% in 2026 and 46% in 2027. This growth trend reflects the strong market demand for high-quality AI video generation tools and KUAISHOU's leading position in this field.

With the release of Keling 2.5 Turbo, Goldman Sachs believes that KUAISHOU Keling AI will maintain its top position among global applications and may see an increase in user engagement with the launch of this new version. Analysts maintain the ARR forecast of $154 million for the fiscal year 2025, higher than the company's official guidance of $125 million